Favorite PPS

Discussion in 'Psychology' started by nutmeg, Aug 22, 2007.

  1. Looking for comments, if anyone has a favorite price range for stocks. IBD, for example warns against pps below 10. Then there is the psychology of a stock split. The investor may be attracted to a $25 stock as opposed to a $50 stock. Some people like $5 stocks. Does the same trader/investor like >$100 stocks also trade $10 stocks? PPs is an important factor in IPO's.

    I understand the investment value being equal regardless of price but do people have favorite pps?

    Suppose in a bull market, there could be a psychological predisposition to a pps range. Certain large groups of traders cluster to price ranges, then once the equity leaves the price range they sell because it is too expensive for their frame of mind and not because its overvalued.

    This also makes me question whether certain equities remain in a price range longer than others for the same reason. For example, suppose an equity trades within a $20-30 range and this attracted the greatest number of traders who quickly pushed the pps to the $30-$35 range, since this price range is less attractive for a group of traders who buy $30-35 the price becomes stagnant. All things remain equal a year passes and the pps creeps up to $50. The Traders who like stocks over $50 quickly push the pps up higher in a shorter time frame than when the stock languished from $35-50.

  2. Growing up in my childhood years, there is one reoccuring thought on life at home. My dad, almost every day used to ask, "Son, do you have any problems?" I would always answer no, then go outside in play.

    Years later, I'm about 26, going through a divorce, bankrupcty, have an infant daughter, my dad came to visit. We went fishing (something he never did) we had a couple lawn chairs and some beer.

    I brought up the this story to him, "Dad, remember when I was a little boy and you always asked if I had any problems? Well, I have one and I'd like to tell you". I told him my problems and he listened while we sipped our beer.

    After I had finished and I waited for his answer. He said "Son, you'll have to figure this out for yourself".

    Well the same situation again. guess I'll have to figure this out for myself. Oh well.